The curious case of why the head of Britain's finance regulator suddenly doesn't want the job anymore

Tracey McDermott is the acting CEO of the FCA.
FCA
Britain's finance regulator is having a bad start to the New Year. Its acting CEO, Tracey McDermott, says she doesn't want to keep her job. She has only been in the role four months. A source tells Business Insider that her decision is a surprise. Just days ago, insiders at the Financial Conduct Authority were under the assumption she would become the full-time chief.

So now the FCA is without clear leadership at a time when it is trying to combat criticism — again — that it is not doing its job properly.

It was such a big deal that t he chairman of the Treasury Select Committee, a panel of politicians that examines financial public bodies and banks, Andrew Tyrie MP, confirmed that he would be hauling in FCA CEO Tracey McDermott and Chairman John Griffith-Jones to explain themselves. "Each one [dropping the reviews] aren't crucial but cumulatively they do give the appearance of a weakening of a resolve and certainly the FCA's decision to drop its review into banking culture looks odd, after all it was in their business plan," said Tyrie.

She doesn't want the FCA CEO job

McDermott replaced Martin Wheatley - who was seen as an intrusive regulator- in September as acting FCA chief. She began a series of closed-door "culture" meetings with the banks, an indicator that the FCA is no longer interested in aggressively investigating potential wrongdoing at banks, at least in public.

Martin Wheatley was the former CEO of the FCA.
Reuters
Now McDermott has dropped a bombshell — she doesn't want the CEO job.

"I have been at the FSA/FCA for 15 years and I remain extremely committed to, and passionate about, the important work we do. It has been, and remains, a privilege to lead this organisation," said McDermott in a statement.

"However, going through the recruitment process has made me reflect on what I want to do with the rest of my career."

"As a result I have decided that this is not the right job for me at this stage of my career. This was a decision taken after many months of careful thought and was not one that I took lightly."

Of course, she is totally entitled to change her mind. But a source close to the FCA told Business Insider today that only four days ago senior members of FCA told them that they expected her to remain as CEO.

Will McDermott go to a bank?

The former FSA CEO Sir Hector Sants left the regulator to join Barclays and then eventually Oliver Wyman, the consultancy firm.
Reuters
So the markets are wondering at the moment is what she is going to do next. Market chatter heard by Business Insider is that it is entirely possible that she is considering leaving to get a job at a bank.

To be clear — there is no public declaration of this and the FCA told Business Insider that there's "no response to the rumours - they are just that at this stage."

But it is a normal step if someone leaves a regulator. Take a look at her predecessors and counterparts.

Former Financial Services Authority (FSA) CEO Sir Hector Sants left to work at Barclays in 2012.